A masked man walks as the sun sets among buildings covered with haze at the Singapore Central Business District Thursday, June 20, 2013. Singapore urged people to remain indoors amid unprecedented levels of air pollution Thursday as a smoky haze wrought by forest fires in neighboring Indonesia worsened dramatically.

JAKARTA, Indonesia — Cloudy skies in Jakarta were no match for the breathtaking haze that hit Singapore on Thursday as air-pollution levels rose to record highs and sparked a war of words between diplomats in both countries over who should shoulder the blame.

Despite the international blame game, the immediate cause was clear enough: fires used to clear land in Sumatra for farming and palm oil plantations. A local meteorological agency reported nearly 150 hotspots alone in Riau Province, itself a hotspot for mining, logging, and palm oil production.

Each year slash and burn practices in Indonesia shroud neighboring Singapore and Malaysia in thick haze. As deforestation has accelerated in recent years, it has worsened.

On Thursday, Singapore sent a delegation from its environmental agency to Jakarta to call for immediate action. Singapore’s environment minister, Vivian Balakrishnan, issued an angry statement on his Facebook page saying no country or corporation “has the right to pollute the air at the expense of Singaporeans’ health and well-being.”

But Indonesia shot back its own statement: Singapore should stop “behaving like a child,” said Indonesia’s Coordinating Minister for People's Welfare, Agung Laksono, who oversees fire response.

Mr. Balakrishnan had asked the Indonesian government to name and shame the companies involved in the illegal burning. But Indonesia’s forestry ministry launched back, saying Singapore and Malaysia shared the responsibility for putting pressure on the resource extraction industry since many of companies were based in their countries.

In 2011 Indonesia’s president, Susilo Bambang Yudhoyono, issued a ban to prevent plantation companies from obtaining new permits to clear virgin forest and peatland. Last month he extended the ban to 2015. But conservationists say the ban is weak because it only applies to new permits, not those already held by companies.

“The clearing is still happening, either done by palm oil or pulp and paper companies,” says Bustar Maitar, a campaigner with Greenpeace. The fires are worse this year, he says, because most of the slash and burn clearing is being done on once swampy peatland. The peatlands are drained, causing them – a major store for climate-changing carbon - to decompose and become highly combustible.

It’s like “gasoline in the forest,” Mr. Maitar explains. In deed, without heavy rain, the burning can last for months.

Growing demand for palm oil is also partly to blame for the smoggy skies. Indonesia is the leading producer of the commodity, an ingredient used in everything from shampoos to sweets to cleaning agents. It is also a top emitter of harmful climate changing carbons, mostly due to forest clearing.

Endemic corruption exacerbates the issue. Since former dictator Suharto stepped down in 1998, Indonesia’s center of power has shifted from the national government to the provinces and districts, where local politicians are responsible for managing the forests.

Many local leaders take advantage of that decentralization by seeking kickbacks from plantation companies in return for operating permits, harming potential environmental gains.

Some of the worst burning this year has originated in Riau Province, where the governor is a leading suspect in a corruption case involving the issuance of illegal logging permits.

In response to media queries, major producers, including US agricultural giant Cargill, and Golden Agri-Resources, which has committed to a conservation policy aimed at reducing deforestation, said they followed a strict zero-burn policy and were making sure contractors complied with it.

On Thursday, Singapore’s pollutant standards index hit a record high of 371. The PSI ranges from 0 to 500, with anything above 300 considered “hazardous.”

The smog from Indonesia's fires disrupted air and sea traffic in 1997 and 1998, causing an estimated $9 billion in economic, social, and environmental losses, according to the Association of Southeast Asian Nations (ASEAN), a 10-member regional group including Indonesia, Malaysia, and Singapore.

Indonesia has yet to ratify an agreement on transboundary haze pollution that ASEAN members signed in June 2002.